Govt notifies power tariff relief for major exporters

Five export-oriented industries to be supplied electricity at 7.5 cents per unit

ISLAMABAD: The government has notified a relief package for the five major export-oriented industries that will receive electricity at a subsidised rate.

According to a notification issued on Friday, the five export-oriented industries will be supplied electricity at 7.5 US cents per unit inclusive of all taxes and duties.

Under this package, the industries include textile, carpets, leather, sports and surgical goods. The package will be applicable from January 1, 2019 to June 30, 2020.

The finance ministry will release Rs23 billion under this package, which is likely to continue in next financial year 2020-21 as well with proposed subsidy of Rs20 billion.

The ECC of the cabinet had approved the relief package for the export-oriented industries on March 11, 2020.

In the wake of the COVID-19 outbreak, the Ministry of Energy, in a separate notification, directed all the power distribution companies to extend the date for submission of outstanding electricity bills for March till April 7, 2020. Electricity consumers will also be exempt from any late payment surcharge.

These industries were committed a fixed all-inclusive tariff of 7.5 US cents per unit (kWh) and a recommendation was submitted for consideration of the ECC.

The economic decision-making body agreed that the five major export sectors would be provided electricity at an all-inclusive rate of 7.5 cents per unit from January 1, 2019 to June 30, 2020.

The electricity bills issued from January 2019 to date, which included surcharges, quarterly adjustments, fuel price adjustments and Neelum-Jhelum surcharge, would be adjusted with a fixed tariff of 7.5 cents per unit.

The Finance Division will pay Rs23 billion in subsidy in FY20 to the Power Division in the first week of July 2020. An amount of Rs14 billion, out of the total of Rs23 billion, will be paid out of the Rs24-billion budget allocation for the gas sector whereas Rs9 billion will be provided through savings under various heads or savings under the Public Sector Development Programme (PSDP).

For continuation of the relief package in next fiscal year 2020-21, the subsidy will be capped at Rs20 billion. 

Published in The Express Tribune, March 28^th, 2020.

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